Quake Markets
Tom W. Bell February 21st, 2008
Markets offer us a potentially useful tool for predicting earthquakes. Imagine the San Andreas fault divided into segments, each of which carries a price based on the present discounted disvalue of a future quake. That price would reflect both a quake’s place in time and its place on the Richter scale. Such a market in quake claims would probably generate some useful–even lifesaving–data. If sufficiently thick, it might offer hedging, too.
I’ve not yet found that sort of quake market. Has any of you? If none exists, at least one should! Plenty of people and institutions would love to know more about earthquakes. Some of them would gladly support an earthquake market, I’d bet. There remain some legal risks, granted, but I think I’ve got a good hack for those. (Long story short: independent contractor researchers paid a base salary for making trades and winning bonuses for correct predictions.)
One nice thing about a quake market: Done right, it would generate powerfully positive externalities, benefiting even those who do not trade on the market. Imagine a map of the San Andreas fault, the price of each tradable segment illustrated by color coding or line thickness. One glance at that picture, and you would know whether it was time to relax, double-check your emergency kit, or head for the hills.
[Crossposted to Agoraphilia.]
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- Comments(3)
New Market: 9.0 Scale Earthquake in 2008
http://www.intrade.com/news/news_194.html
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http://www.portfolio.com/views.....arthquakes
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Are they any good advanced indicators for earthquakes? That’s the key for traders. Are there public data to monitor that are precursor to earthquakes?
Tom Bell,
It’s now a tradition on Midas Oracle, when a guest author posts, that I scold the author when he/she has not yet set up a "gravatar" —a face pic that appears along his/her posts/comments.
http://gravatar.com/
It’s easy to set up, and it’s universal.
The only real advanced indicators are pre-shocks. There has never been a 9.0 earthquake recorded in California. A more useful and active contract might predict 7.0+ earthquakes occurring in a list of certain counties.